Hours after President Donald Trump appeared to take the temperature down with Fed Chair Jerome Powell, the White House on Friday resumed its attacks on the central bank chief and its headquarters renovation.
After touring the central bank’s main office on Thursday afternoon, Trump told reporters that he wouldn’t consider the construction project a fireable offense for Powell. “I feel good about it,” Trump said about his relationship with the Fed chair. He added that “I just don’t think it’s necessary” to attempt to fire Powell.
But on CNBC on Friday morning, Office of Management and Budget Director Russ Vought said he observed “largesse everywhere” on the tour of the Federal Reserve’s construction site. Vought said his criticism is about “doing enormous renovations of an entire headquarters building and largely escaping the notice of the public and Congress.”
The Fed chair testifies before Congress twice a year and is subject to oversight from the Senate banking committee and House financial services committee.
Vought was asked if the renovation project was a pretext to firing Powell. He pointed to Trump’s recent comments in which the president said it was “unlikely,” but did not fully rule it out. A president can only fire a Federal Reserve official “for cause.”
For months, the president and top administration officials have attacked Powell and his management of the central bank along with its interest rate policy. Trump has said he thinks Powell “hates me” and is a “stupid person.” But standing next to Powell Thursday on the tour of the renovation project, the president changed his tone dramatically, saying: “I don’t want to be personal. I would just like to see it get finished.”
Powell has asked the independent inspector general that oversees the Fed to review the construction project for a second time. During its first review, the inspector general did not report any major problems with the project or any abuse or fraud concerns.
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For its part, the Federal Reserve has published an FAQ website detailing the renovation and reasons for cost overruns, which include asbestos, toxic soil and rising building material costs. Powell has also written to Congress and Voight in detail about the project.
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The Federal Reserve said in a statement Friday that it was “honored to welcome the President” to its offices on Thursday. “We appreciated the opportunity to share progress on the renovation with him and with Sens. Tim Scott and Thom Tillis. We are grateful for the President’s encouragement to complete this important project. We remain committed to continuing to be careful stewards of these resources as we see the project through to completion.”
On Friday morning, Trump again commented on the Fed tour, saying it was a “very good meeting” with Powell. He claimed that Powell told him “the country is doing very well,” adding, “I think he’s going to start recommending lower interest rates.”
The Fed holds its next interest rate meeting on Tuesday and Wednesday and while the central bank’s rate-setting panel is not expected to lower rates at that meeting, most analysts and market participants expect it will cut rates at its meeting in mid-September.
Powell has said that if Trump’s tariffs weren’t so substantial, the Federal Reserve likely would have cut rates by now.
